Real Estate

$500,000 to spend on affordable housing cottages, but nowhere to build them

A critical affordable housing project that would provide homes for vulnerable older women is in jeopardy.

Generous locals have donated $500,000 to construct four onebedroom cottages for homeless women on the Northern Rivers but, despite tireless work behind the scenes, there is still nowhere to build them.

At its meeting in July 2021, Ballina Shire Council agreed to undertake an open tender process for one council-owned residential block of land at Wollongbar to be used for a pilot social housing project, to house single, older homeless women.

Wollongbar resident Marilyn Perkins, pictured, has been the driving force behind this project, but she said discussions with the council had stalled. She had hoped the pilot project would eventually be replicated in other parts of the Northern Rivers, making a huge difference to the social fabric of our communities.

However, she now has real concerns the pilot will not proceed.

“This resolution from the council’s July 2021 meeting stands, but there has been no progress since then,” Ms Perkins said.

“We understand a staff report, to come to the February council meeting, will detail plans for the council to undertake its own housing project, and our tender process may not be activated in the foreseeable future.”

Ms Perkins said affordable housing for older women was in short supply and the success of this project was vital.

“The fastest growing cohort of homeless people is single older women over 55,” she said.

“Our project aims to provide a real solution – although more will be needed.”

Ms Perkins said a number highly experienced professionals were working pro bono on the project, including David McGrath of Davcam Pty Ltd, Chris Lonergan and Sumarah Ramsay of Byron Bay Planning, Dona Graham of Carefusion Advocacy and Legal, and Fiona Gibson of Sanctuary Design.

She hopes the newlyelected councillors will help progress the project by agreeing to donate council-owned land at Wollongbar or selling it for a peppercorn price.

If not, they hope a generous donor will come on board to help them secure land so the cottages can be built sooner rather than later.

“We are keen to see this project become a reality, but we do need land,” Ms Perkins said.

“We are sitting here with half a million dollars, waiting to build – it’s incredibly frustrating that we can’t progress this.”

Anyone who can help by donating land, or providing funding to buy land, should contact David McGrath via email: david@davcam. net.au

Rates to rise (also incomes and rents)

Mortgage rates will rise gradually over the next couple of years.

Still, the impact on the housing market won’t be too dramatic, according to Pete Wargent, pictured, co-founder marketplace connecting homebuyers to buyer’s agents and lenders, BuyersBuyers. Mr Wargent said, got well and truly back into the target 2 to 3 per cent band in 2021, after half a decade of undershooting”. different from overseas, with a trimmed mean 2.6 per cent. In fact, for much of the past halfdecade, commentators have been calling for a after so many years of undershooting”.

“Compared to some of the readings coming out of Europe or the U.S. – and even New Zealand running out of control in Australia”. largely been driven by food and new dwelling costs, where pressure will likely ease in 2022, and fuel costs, which are admittedly less predictable”.

“Rents are rising at the fastest pace since 2007, which will keep property investors interested in the housing market, while household incomes will also increase materially as we approach full employment,” Mr Wargent said.

Steady increase

Doron Peleg, cofounder and CEO of BuyersBuyers, said pricing interest rate hikes aggressively, but it’s unlikely we’ll see a cash rate any time soon. Mr Peleg said, “even if the cash rate does increase in time, we think that any increases will be delivered gradually, and in a controlled manner”.

“The Reserve Bank may not be in too much a rush to hike rates, though, given that annual wages growth is only 2.2 per cent, and expectations for pay rises are still anchored at low levels”.

“Fiscal support will also be wound back over the next year or two, and it’s not yet clear how the economy will track when support is withdrawn”.

“In any case, much to supply chain issues in 2021, which will be mostly resolved later in 2022, particularly for food and new dwelling costs, so hiking interest real wages are negative might not be desirable,” Mr Peleg said.

Market modelling

Mr Wargent said commentators have sometimes overstated the impact of rising mortgage rates on the Australian housing market for four main reasons.

“Firstly, because to housing market modelling, estimates of the impact on housing prices should be based upon changes in real expectations are to move materially higher, then any related impact on housing prices would correspondingly be lessened. Given Reserve Bank modelling was referenced in 2019 to isolate the impact of lower real rates, it doesn’t make sense to translate estimates across to forecasts today, given that the context is not the same.

“Secondly, the response of prices in the housing market model is nonlinear, so logically interest rate cuts should have had a far greater positive impact on sentiment as interest rates approached zero. “Thirdly, any impact on housing prices should be relative to your baseline forecasts. Thus, if forecasts were for housing prices to increase by, say, a few per cent per annum, then only relative to these forecasts would the impact on prices be seen as a result of rising mortgage rates.

“And fourthly, any dramatic predictions of a crunch would need to assume no other change in macro variables, which is unrealistic. In reality, in our opinion, we should be expecting employment growth and population growth to come roaring back over the next couple of years, comfortably offsetting even a potential 1 per cent increase in interest rates.

“And, as noted, we also expect hikes to the cash rate to be delivered in a considered and gradual manner, even if funding costs are rising.

“We have consistently discussed many of these variables with our clients such as employment growth, the immigration reboot, between lenders, low out-of-pocket expenses for property investors, and the ability of households to absorb higher repayments,” Mr Wargent said.

“Overall, we think mortgage rates will rise in 2022 and 2023, but the impact of this on the housing market has often been overstated.”